Auckland Council Group today published its 2019/2020 Annual Report on the Auckland Council website.
2019/2020 was the second year of the 10-year Budget 2018-2028, which pledged a $26 billion programme of capital investment to ensure infrastructure development keeps pace with demand. The group invested a record $2.6 billion in the city’s assets including $1.1 billion in transport infrastructure and $748 million in water infrastructure.
Mayor Phil Goff says, “Auckland Council’s prudent and responsible approach to financial management over the past financial year has ensured that we are in a strong position to recover from the COVID-19 crisis. While this and the worst-ever drought in our region has put pressure on our finances, we will continue to deliver the essential services Aucklanders rely on and invest in the future of our region.
“Our continuing investment in important transport projects such as the City Rail Link, the Eastern Busway and the Puhinui Station Interchange will help to reduce traffic congestion and carbon emissions, while making it faster and more convenient to travel around our region.
“We are continuing our work to substantially reduce wastewater overflows and improve water quality in our beaches, harbours and streams, with construction of the $1.2 billion Central Interceptor now underway and infrastructure work to reduce wastewater overflows to beaches in progress. We are protecting our natural environment and native species, and have progressed development of our Climate Action Plan, which was adopted in July 2020.
“We will continue to make important investments in our region to support Auckland and New Zealand’s recovery from the COVID-19 crisis through infrastructure-driven stimulus. This will also create a legacy for future generations and ensure that we deliver on our vision to create a city that is vibrant, inclusive and successful.”
Finance and Performance Committee Chair Desley Simpson said, “Reducing costs, including by controlling discretionary expenditure and removing duplication, has helped achieve $23 million in savings for Aucklanders.
“While our prudent fiscal management has ensured that we are well-placed to steer a course to recovery from the COVID-19 crisis and the drought, in the face of strong headwinds we will need continue to find economies and become a leaner, more agile organisation.”
Auckland Council Chief Executive Jim Stabback said the results of the last financial year, and the measures the council has taken to address the financial impacts of COVID-19 through the Emergency Budget, has set the organisation up to manage the challenges ahead.
“While we are progressing with our plans to become a more efficient organisation, we remain committed to ensuring our work programmes are targeted at the things that matter the most to the future growth and success of Auckland and its people,” he said.
The group ended the 2019/2020 financial year with an operating surplus before gains and losses of $752 million, reflecting the fact that the COVID-19 pandemic and the drought impacted council in the fourth quarter of the year. This positions the council strongly to respond to these crises, which are expected to pose a $690 million challenge in the 2020/2021 financial year.
Borrowing for capital investment increased by $1.3 billion as the council continued to ramp up delivery of much-needed infrastructure assets for the city. To facilitate this significant investment, the council has continued to take a prudent approach to managing debt and finances, keeping its net debt to revenue ratio under our policy limit of 270 per cent. This is reflected in credit ratings that were reaffirmed at AA from S&P Global Ratings and Aa2 from Moody’s Investors Services on 28 September and 28 April 2020 respectively. Both outlooks remain “stable”.
Because of the ongoing financial challenges from the COVID-19 pandemic and the drought, Auckland Council expects its net debt to revenue ratio to increase to no higher than 290 per cent in the short-term. Council is committed to bringing this back to prudent and sustainable levels as soon as possible.
To find out more about the overview, service performance, local board performance, financial results and the group’s response to climate risks and opportunities, refer to the Auckland Council Annual Report 2019/2020 and the Auckland Council Summary Annual Report 2019/2020 available on the council’s website.
